When selecting a non-admitted insurer, what should a broker prioritize?

When selecting a non-admitted insurer, prioritizing the insurer's financial stability and claims ability is crucial. This focus is essential because non-admitted insurers do not participate in state guaranty funds. In the event of a claim, if the insurer faces financial difficulties or insolvency, policyholders are left without recourse to recover losses. Therefore, evaluating an insurer’s financial health, such as its credit ratings, reserve levels, and overall claims history, ensures that the broker is placing coverage with an entity capable of fulfilling its obligations.

In contrast, although marketing strategies, headquarters location, and the number of policies underwritten may provide some insight into the insurer's market presence or approach, they do not directly impact the fundamental ability of the insurer to pay claims. The primary concern in insurance—especially in surplus lines where the market is often used to cover unique or hard-to-place risks—should always be the insurer's capacity to handle claims reliably and financially. Thus, ensuring that a non-admitted insurer is stable and capable is absolutely vital in the selection process.